Business intelligence and organizational performance

Abstract

PurposeOrganizations introduce business intelligence (BI) to increase their performance, but often, this initiative is not aligned with the business process management (BPM) initiative, which also aims to improve organizational performance. Although some findings from the literature indicate that BI implementation has a positive impact on organizational performance, the impact seems to be indirect. Therefore, the purpose of this study is to enhance the understanding of how BI maturity is translated into organizational performance. Alignment of BI and BPM initiatives seems one possible way for creating business value with BI, particularly because BI enables process performance measurement and management, which allows the BI initiative to become more business focused.Design/methodology/approachA questionnaire was prepared and used to collect data in Croatian and Slovenian organizations with more than 50 employees. A BI–BPM alignment measurement instrument was developed for the purpose of this study using the recommended process of scale development and validation. A total of 185 responses were analyzed by the structural equation modeling technique.FindingsOur results provide evidence that the effect of BI on organizational performance is fully mediated by alignment of BI and BPM initiatives, and therefore, BI business value can be generated through the use of common terminology and methodologies, as well as a strong communication between BI and BPM experts, managers and teams in order to coordinate the two initiatives.Originality/valueThis study has responded to the call for better understanding of how the impact of BI on organization performance is realized. It confirmed that BI and BPM initiatives should be aligned in order to give BI a business value.